Cocoa Market Overview
On Friday, cocoa prices on the December ICE NY Cocoa (CCZ25) finished down by 20 points (-0.32%), while the December ICE London Cocoa #7 (CAZ25) dropped 41 points (-0.90%).
The market saw cocoa prices decline as New York cocoa retreated from a three-week high, joining Robusta in a downward trend after Thursday’s peaks. Ahead of the weekend, some long liquidation pressures filtered through.
Supply issues are lending some support to cocoa prices. Recently, the European Union suggested postponing new deforestation regulations by six months, contrasting with the earlier one-year timeline. These regulations require traceability for products, including cocoa, from regions where deforestation for agriculture has occurred, which could restrict supply entering the EU.
Tightening stocks are an additional factor. Cocoa stockpiles monitored by ICE at U.S. ports have dipped to a seven-month low of 1,843,721 bags.
There are signs that cocoa exports from Ivory Coast, the leading cocoa producer, may be slowing. According to government data, between October 1 and October 19, Ivorian farmers shipped 133,209 tonnes, a sharp drop of 31% from the 192,804 tonnes in the same period last year.
However, the overall cocoa demand remains weak. Last Friday, the Asia Cocoa Association noted a significant 17% decrease in cocoa milling volume in Asia during the third quarter, reaching 183,413 units—the lowest in nearly a decade. Meanwhile, the European Cocoa Association reported a 4.8% year-over-year decline in European cocoa crushing volumes, totaling 337,353 tonnes.
In North America, the National Confectionery Association indicated a slight rise in coca crush volumes, up 3.2% year-over-year to 112,784 tons in the third quarter. Yet, this increase appears skewed due to the addition of new reporting companies.
For the past two months, cocoa prices have faced downward pressure due to soaring prices and concerns that tariffs may dampen chocolate demand. Data from Circana revealed that chocolate sales in North America dropped by over 21% in the 13 weeks ending September 7 from the previous year.
The crop outlook in Ivory Coast appears somewhat pessimistic for cocoa prices. Mondelez recently reported that the latest West African cocoa crop was 7% higher than the five-year average and markedly better than last year’s harvest. As farmers begin harvesting the main crops, there’s an air of optimism regarding their quality.
In Ghana, cocoa shipments have surged, further affecting prices. In just four weeks ending September 4, 50,440 tonnes of cocoa arrived at the ports, compared to only about 11,000 tonnes during the same period in 2024, as Ghana ranks second globally in cocoa production.
Conversely, a decrease in cocoa production in Nigeria, the fifth-largest global producer, could provide some support. The Cocoa Association of Nigeria forecasts a drop to 305,000 tonnes for 2025/26, an 11% decline from the anticipated 344,000 tonnes for 2024/25. Nonetheless, Nigeria did report a 15% year-on-year increase in cocoa exports to 17,239 tonnes in August.
Lastly, the International Cocoa Organization (ICCO) has revised the global cocoa deficit for 2023/24 to a staggering 494,000 tonnes, marking the largest gap in over 60 years. Their estimates indicate a 4.380 MMT production for 2023/24, down 13.1% from the prior year. The ICCO also announced a decrease in the global cocoa stock-to-crushed ratio, now at 27%, the lowest in 46 years. They predict a surplus of 142,000 tonnes for 2024/25, the first in four years, and project a 7.8% year-on-year increase in production to 4.84 MMT.
